In what is becoming a he said/she said issue, a group of more than 12 rural LECs and conferencing providers have banded together to form the Coalition for Carrier Neutrality, focused on AT&T Inc. and others allegedly blocking their users calls into free conference calling services.

Meanwhile, Sprint Nextel Corp. this week sued a number of Iowa phone companies and service providers over the issue.

Free conferencing services offer users a local call-in number to connect to the conference, which can drive additional phone traffic and revenue for the local carrier. That local carrier in turn charges a long-distance company such as AT&T or Sprint by the minute for each local connection, and may share some of that revenue with the call-in service.

In an age of flat-rate long-distance plans, AT&T said it is paying more in termination charges than what they would get from the minutes on their network to the tune of $250 million (the coalition says its more like $20 million).

Further, Sprint said it has found that at least 10 rural LECs in Iowa have conspired with the providers of conferencing and international calling services to actually defraud long-distance companies by driving traffic to local phone companies that charge high rates to Sprint Nextel, a process Sprint and AT&T have dubbed traffic pumping. Sprint said the scheme includes the local carriers charging up to 26 times the amount for access charges to their calling areas than other companies do.

“Make no mistake this is not just a billing dispute among phone companies,” said Kent Nakamura, vice president for telecom management for Sprint Nextel. “We’re taking a stand for our customers and for ourselves against a continued pattern of illegal arbitrage on the part of certain companies a scheme that attempts to pick our pockets and threatens our customers’ access to unlimited long-distance service.”

The new coalition said thats a misrepresentation, and accuses the long-distance companies of illegally blocking calls to avoid paying legally owed access charges.

“We are uniting to debunk the myths that the IXCs have been spreading as a smokescreen to deflect attention from their illegal call blocking and nonpayment of access fees to members of this coalition, said Jonathan Canis, partner at the law firm Kelley Drye & Warren LLP, which is urging the FCC to launch an investigation and impose fines for what it calls outrageous behavior.

What this is all really about is a rate dispute. They think the rates are too high, explained Canis. They first started by withholding paymentand now theyve started blocking numbers just to ratchet things up.

The coalition charges that AT&T and Sprint have been blocking calls for the past month or more. In fact, several of the new coalitions members report sporadic blocking of particular numbers, with only about 50 percent to 80 percent of calls being completed. The victims are the users of services like FreeConferenceCall.com, which works with LECs and more than 10 companies in Iowa, Nebraska and South Dakota, hosting hundreds of thousands of users.

This indicates dirty tricks in the routing of traffic that has the effect of blocking some calls and degrading overall service, reads todays coalition statement. The Iowa Utilities Board requires 97 percent call completion or higher as a standard for acceptable phone service. Coalition members engineer their networks based on this call completion rate, and a 20 to 50 percent drop does not occur by accident.

Eventually, the coalition expects a legal resolution to the issue. Several pending court cases and a counter suit from AT&T are in process, and Sprints suit was filed Monday in federal court in Iowa. It names 14 rural LECS and other service providers.

Now, the coalition also will lobby at the FCC for a swift resolution to the issue. The FCC has repeatedly said that carriers cannot block traffic on the PSTN over access charge disputes, lest the network reliability decline, according to Canis. In three cases over the last six years, the FCC expressly rejected AT&T complaints on this issue, ruling that the type of conferencing services provided by the coalition members is legal, he added.

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